Most retailers told FCW that they saw significant improvement in 2012 and are expecting even better sales in 2013, but are hesitant about how events in the economy might affect business.

“I was surprised that 2012 was still up and down, but we are fortunate and have been ahead,” said Peter Messner, president of Messner Carpet, Pittsford, a suburb of Rochester, N.Y. “Some of our competitors haven’t been able to invest in their showrooms, giving us an advantage.”

For 2013, Messner has set a goal of a 6 to 8 percent increase and is pursuing that by attracting a younger market. “We are re-developing our website to reach the 35 plus year-olds. By the end of the year, it will have a young, fresh look. We are also getting involved with social media and changing our product mix in showroom,” Messner explained. “We will be selling more PET carpet and will show it at the front of the store. We will still have the best offering at the higher end of the market, but will move that farther into the showroom,” he added.

Aaron Pirner, owner and CEO of CAP Carpet, is very optimistic. CAP, a CCA Global partner, operates 16 locations housing 19 business units (all flooring related) in and around Wichita, Kansas. “We have had a good growth year. When the market went down in ‘07 and ‘08, we started making investments — better people, better systems, locations, training,” Pirner said. “When things started to improve, we were in a great position. We’ve taken market share, starting in 2011. And 2012 was great, with success mainly in our wholesale and commercial businesses. Residential remodel has been OK too.”
He expects increases across all areas — commercial, new housing and remodeling. “I think 2013 will be good because consumer savings are up, a lot of debt has been paid down, housing is coming back and the consumer has ‘frugal fatigue,’.” Pirner explained. “Interest rates are low and there’s a lot of pent up demand.

“Our goal is to continue to grow,” Pirner noted. “We will continue to invest in the basics. We are working on a new CAP website for 2013 so people will be able to know better who we are and what we do,” he stressed.
Fred’s CarpetsPlus in Torrance, Calif. had a fairly good year in 2012 and Jerry Butler, co-owner of the two-location operation, is hoping it continues in 2013. While concerned with “the extremely negative political climate in Washington and Sacramento,” Butler said, “We expect gradual increases in both our residential and commercial businesses.”

The second location, acquired in May 2012, has had a positive influence on retail sales growth, Butler reported. Aiming to reach more consumers and increase store traffic, Fred’s has upgraded its website, joined Facebook and started a steady program of advertising twice a week for both locations in the local paper.
“2012 was good, probably the third best year in 23 years of business in sales,” said Jim Hillman, president and co-owner of Hillman Flooring & Design, Sugar Hill, Ga. “Profitability is more important and it was the second best year for profits,” he stated.

But Hillman is cautious about 2013. “Right now, I see construction continuing a slow rebound in the first quarter of 2013. It’s the second, third and fourth quarters that are in question,” he said. “Builders are slow to pay and, being a higher end store, we have a customer base that is somewhat limited. They will not be spending unless the economic concerns are answered.”
Still, Hillman decided to expand his showroom and expects the work to be complete by mid-January. Catherine Hillman, vice president and co-owner, said, “We have stayed open throughout the process of adding about 3,000 square feet of space and raising the ceilings. We have added new employees and joined Abbey Carpet & Floor, so we now have access to private label programs. In 2013, we’re going to have a new website and do more marketing through Abbey,” she added.

Rick Warman’s Flooring America includes stores in Chicago suburbs, Frankford and Posen, Ill. and is adding a third in nearby Indiana by the end of the year. “I’m guardedly optimistic about 2013,” said Rick Warman, president of the retail operation. “I think we’ll do at least a 10 percent increase once we get into March (because winters are cold for shopping). I expect a slow, steady recovery with some bumps in the road. I think the government will avoid the fiscal cliff and even if it doesn’t, it won’t make much difference,” Warman said.

Warman is confident that his new store, also branded Flooring America, will be successful even though another flooring store failed nearby. “I will make it neat and clean and when a customer walks in, she will want to buy something,” he stressed. “My stores are full of product, neatly arranged, so there’s something for everybody.”
Warman isn’t planning any major changes. “I’m constantly looking at my product mix and am willing to get rid of a line, if it isn’t working. I private label everything,” he said.

Wendy Werner, president of Carpet Town, a Stainmaster Flooring Center in West Allis, Wis., is also feeling more positive about 2013. “We just had one of the best weekends ever without advertising. I think if we can get past the fiscal cliff and not just postpone the issue, people are going to feel better about spending money on their homes,” Werner said.
For 2013, Carpet Town is updating its showroom and planning on doing more advertising.

Still, there are places that recovery has not reached. For Mike Jurkovich, managing partner of Eureka Floor Carpet One, in Eureka, Calif., 2013 is looking highly uncertain. “Historically, we went after new residential construction, residential remodeling and commercial,” Jurkovich noted. “The new home market here (about 300 miles north of San Francisco) is abysmal and residential remodeling is almost as bad. This has been our first profitable year in four years, but that is only because we have had several large multi-family projects that all, to some degree, had government support. My fear is that the government segment will be curtailed too in 2013. I don’t expect significant recovery in homes and remodeling. Over the past three years, I’ve cut costs to the bone. I am working harder and longer but that’s the only way to stay profitable.”